Contract for Differences

Contract for Differences (CfD) definition

/ˈkɒntrakt/ /for/ /ˈdɪf(ə)r(ə)ns/

What does Contract for Differences mean?

A type of derivative contract in which two parties agree to exchange the difference in value of a specified asset between the time the contract is opened and the time it is closed. The contract payout will be the difference in the price of the asset. They are similar to spread betting.

Contract for Differences explained

Contracts for difference may potentially be used for insider dealing and market manipulation and are therefore within the scope for the Market Abuse Regulation (EU) 596/2014. Contracts for difference are a potential source of harm to retail investors. The Financial Conduct Authority has therefore imposed restrictions on the terms on which retail customers may enter into contracts for difference.

Variances

CfD
CFD

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